Prescription Access Litigation coalition member National Women’s Health Network recently sent a news item about the FDA’s September 29 letter to LabCorp, advising it that its ovarian cancer screening test is a medical device that must be pre-approved by the FDA before it can be marketed. In response to the letter, LabCorp (NYSE:LH) announced at the end of October that it is halting sales of OvaSure.

Back in August, the New York Times ran an article on the test: Cancer Test for Women Raises Hope, and Concern

As the FDA’s letter said:

Our review indicates that this product is a device under section 201(h) of the Food, Drug, and Cosmetic Act (FDCA or Act), 21 U.S.C. 321(h), because it is intended for use in the diagnosis of disease or other conditions, or in the cure, treatment, prevention, or mitigation of disease. The Act requires that manufacturers of devices that are not exempt obtain marketing approval or clearance for their products from the FDA before they may offer them for sale….

According to our records, no such determination has been made for OvaSure™. Because you do not have marketing clearance or approval from the FDA, marketing OvaSure™ is in violation of the law. The device is adulterated under section 501(f)(1)(B) of the Act, 21 U.S.C. 351(f)(1)(B)…. The device is also misbranded under section 502(o) the Act, 21 U.S.C. 352(o)….

Here’s what National Women’s Health Network had to say about the test:

Don’t Be Fooled by OvaSure

The Food and Drug Administration (FDA) recently warned that the marketing of a new ovarian cancer test violates the laws guarding against promotion of unproven technologies, vindicating skeptics like the National Women’s Health Network, who were concerned that the test was not ready to be used for routine cancer screening. OvaSure is a test that measures six different proteins in blood samples and calculates the odds that a woman will develop ovarian cancer. The $220 test was developed by LabCorp and has been available since late June.

When ovarian cancer is detected in its earliest stages, more than 90 percent of women survive at least five years. When the cancer is discovered in its late stages, after it has spread beyond the ovaries, only about 30 percent of women survive five years. There is currently no effective screening tool for ovarian cancer, so only about 20 percent of cases are detected early. OvaSure was developed to fill this void, but the test has not yet been shown to be very effective at detecting early disease. False positives are also a serious concern. A screening test that says a woman has a cancer when she doesn’t is dangerous because it subjects women to unnecessary worry and sometimes even surgery, including the possibility of unnecessary removal of a healthy ovary. (It shouldn’t happen, but it does.)

The NWHN worked hard with other consumer safety organizations and with our allies in Congress to enact FDA reform in 2007 sending the FDA a clear message that the agency should be tougher in enforcing its rules to protect women from ineffective drugs, devices and tests that could put their health at risk.

LabCorp has been told by the FDA that it must meet premarketing approval requirements before getting the okay to market Ovasure. Thanks to everyone who helped us send a message that women want safe and effective health products, as well as speedy approvals. We urge Labcorps, and others trying to find a good screening test for ovarian cancer, to do the research necessary to prove the tests will meet the FDA’s standards and actually improve women’s health. Women are waiting.

PAL coalition member the Annie Appleseed Project will hold its first ever conference on January 10-11, 2008 in West Palm Beach, Florida. The conference will explore Evidence-based Complimentary and Alternative Medicine (CAM) for people with cancer, and provide a forum for discussions and networking. Annie Appleseed Project founder and cancer survivor Ann Fonfa, who became an outspoken activist just two weeks after her first cancer related surgery in 1993, will be among the impressive roster of featured speakers. Other speakers will include advocates and medical professionals who will “introduce evidence-based information, and an understanding of patients’ needs around complintary and alternative therapies.”

Click here for more information about the Annie Appleseed Project and their upcoming conference.

Bristol Myers Squibb (NYSE:BMY) is the latest defendant to reach a settlement with plaintiffs in the massive Average Wholesale Price litigation (In re Pharmaceutical Average Wholesale Price Litigation, before Judge Patti Saris of the U.S. District Court for the District of Massachusetts). A number of PAL coalition organizations are plaintiffs in this massive case, against dozens of pharmaceutical defendants. In a nutshell, the case alleges that the defendants fraudulently and artificially inflated the “Average Wholesale Prices” (AWPs) of hundreds of physician-administered drugs. These AWPs are listed in commercial pricing publications and were used by Medicare and insurers to determine how much to pay doctors for drugs administered in doctors’ offices.

A trial of Medicare patients’ claims against BMS was originally slated to begin this coming Monday, July 23. Last month, Judge Saris issued a 183-page decision in another phase of the case, in which she found that BMS and two other defendants (Astra Zeneca and Warrick, a subsidiary of Schering-Plough) caused the publication of false and inflated Average Wholesale Prices for seven drugs. The BMS drugs were Taxol, Vepesid, Cytoxan, Blenoxane and Rubex.

The decision last month found BMS and the other defendants liabile for damages caused to classes of Massachusetts insurance companies and non-Medicare consumers in Massachusetts. The trial that was slated to begin next week concerned damages caused to a nationwide class of Medicare patients. The settlement is not surprising in the wake of Judge Saris’ decision last month. The claims of the nationwide Medicare class are based on the same facts as those that Judge Saris found in her recent decision, and the causes of action (primarily state consumer protection acts) pretty closely mirror those in that decision as well (which were based on the Massachusetts Consumer Protection Act, Chapter 93A). Thus, if the trial had gone forward, it’s likely that the facts that were established in the previous decision would have already been found to be true (known in legal parlance as “collateral estoppel”) — the only issues thus would have been whether BMS violated those other state consumer protection acts and the federal RICO statute, and the extent of damages that caused.

No settlement has been filed with the Court yet, but on July 18 Bloomberg News reported on the fact that a settlement was reached:

Bristol Avoids Trial Over Taxol Price With Settlement (Update2)

By Cary O’Reilly

July 18 (Bloomberg) — Bristol-Myers Squibb Co. agreed to settle a class-action lawsuit over prices the company charged for its Taxol cancer drug and other medicines, just before a trial was set to begin in Boston.

The company, which admitted no wrongdoing, agreed to pay $13 million to settle all claims in the nationwide suit, Bristol spokeswoman Laura Hortas said. The case, which was set for trial July 23, was filed on behalf of consumers in dozens of states who made copayments for company drugs based on prices that had been artificially inflated, according to the complaint.

U.S. District Judge Patti Saris in Boston last month ordered Bristol, AstraZeneca Plc and Schering-Plough Corp. to pay damages for overcharging on drugs through so-called average wholesale pricing, or AWP. The trial that was to begin next week concerned only copayments for Bristol drugs. Taxol generated $1.6 billion in sales in 2000 before Bristol lost patent protection for it.

“We’re quite pleased with the settlement,” plaintiffs attorney Steve Berman of Hagens Berman Sobol Shapiro in Seattle said in an interview. “Any time you get over 100 cents on the dollar in recovery for consumers, that’s pretty darn good.”

The company also agreed to pay as much as $1 million for the cost of notifying affected consumers.

Consumers made insurance plan copayments under Medicare Part B based on average wholesale prices for Bristol drugs, including Taxol, that were far higher than what the company was charging doctors and hospitals, according to the complaint.

Out of Pocket

Chemotherapy and other medicines administered in physician offices were covered under Medicare Part B, with patients in many instances paying 20 percent of those costs out of pocket. That meant any increase in the average wholesale price for Taxol could result in higher fees for patients on chemotherapy.

Saris will hold a hearing Aug. 9 to consider the Bristol settlement, according to a docket entry on her court’s Web site.

“Bristol-Myers Squibb is pleased to have reached a settlement of the Class 1 claims in the average wholesale price litigation,” Hortas said.

In an earlier case, Saris found that Bristol-Myers inflated AWP for five medications, including Taxol. The AWP price for the cancer drug was found to be as much as 500 percent higher than what was charged to doctors.

AWP, which is self-reported by drugmakers, was once used by government health programs such as Medicare to set reimbursement rates. Medicare has moved away from the system, though some private insurance plans, including Blue Cross, still use it.

Medicare Switch

Medicare, the federal health plan for the elderly, switched in 2004 from AWP to a system of paying 106 percent of the average reported sale price of a drug.

Consumers who say they were harmed by AWP pricing for more than 300 drugs sued in 2001, alleging an industrywide scheme to defraud the U.S. health-care system. The suit was carved up by Saris based on different drug types to make the litigation more manageable.

GlaxoSmithKline Plc, Europe’s biggest drugmaker, agreed in August to pay about $70 million to settle claims by state attorneys general and consumers that the company used AWP to overcharge government health programs for its medicines.

Bristol shares fell 7 cents to $32.07 as of 12:45 p.m. in New York Stock Exchange composite trading, giving the company a market value of $63.3 billion.

The case is In Re: Pharmaceutical Industry Average Wholesale Price Litigation, MDL No. 1456, U.S. District Court, District of Massachusetts (Boston).

To contact the reporter on this story: Cary O’Reilly in Washington at caryoreilly@bloomberg.net

This just in from Breast Cancer Action, a member of Prescription Access Litigation’s coalition of 130+ consumer advocacy organizations. The pricing of cancer drugs is one of the most troubling trends in the world of prescription drugs. This press release points out that the price today of these drugs is what’s important, not some arbitrary notion of “effective cost,” which seems more like an actuarial notion than a principle that should guide patients’ and doctors’ choices regarding medications.

FOR IMMEDIATE RELEASE

Mary DeLucco
mdelucco@bcaction.org
415-243-9301, ext. 16

Breast Cancer Action Says Two New Drug Pricing Studies Miss the Mark

San Francisco, CA (June 26, 2007) — Breast Cancer Action (BCA) today expressed grave concerns about two new studies that purport to justify the exorbitantly high price of breast cancer drugs.

One of the studies looked at Herceptin –a drug that costs upwards of $40,000 a year. The other study looked at Aromasin – an aromatase inhibitor that costs more than $3000 per year in the United States.

Both studies measured “cost effectiveness” in terms of the number of years each drug prolonged life, combined with the quality of life. This “cost effectiveness” measure was used to estimate the cost of the drugs over a patient’s lifetime. Based on this equation, researchers said the “effective” cost of the drugs was much less than the actual purchase price.

But BCA says that the “effective” cost is a meaningless concept to individual breast cancer patients, and points out that both studies were funded and — in the case of the Herceptin study partially staffed — by the companies that make the drugs.

“The bottom line is that Herceptin still costs at least $40,000 a year in the United States,” says BCA Executive Director Barbara A. Brenner. “The cost of these cancer drugs will not be reduced to reflect the ‘effective cost’ detailed in these studies. The ‘projected lifetime costs’ are meaningless to patients who have to pay for these drugs today.”

Brenner also points out that studies like these will prove most useful for pharmaceutical companies by encouraging insurance firms to pay the very high prices the drug companies are charging.

The fact that these drugs cost thousands of dollars is more evidence of the need for the United States to work toward a universal health care system that would allow the government to negotiate with pharmaceutical companies for lower drug prices.

Breast Cancer Action (www. bcaction.org) is a national grassroots education and advocacy organization that carries the voices of people affected by breast cancer to inspire and compel the changes necessary to end the breast cancer epidemic.

Since 1998, BCA has refused to accept funds from corporations that may create a real or apparent conflict of interest for BCA. Corporations covered by this policy include pharmaceutical companies.

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